Unions reacted angrily to Tata’s decision on Tuesday night, and Labour has led calls for the Government to intervene to save the steel industry from total collapse.

Rotherham MP John Healey said Prime Minister David Cameron should meet unions and discuss the future of steelmaking in the UK, ‘because it is too important for us to lose’.

TATA Steel plant at Rotherham which is under threat after the Indian owners said they are looking to sell the business
Picture Dean Atkins

“They have held back from doing what has been needed over the last few years and now they have really got to step up otherwise we will lose the steelmaking industry in this country and they will be to blame.”

Mr Healey said the news was a ‘body blow’ to Rotherham.

“The families, the steelworkers are reeling from this,” he said. “I called a meeting with steelworkers and their families in Rotherham last week to meet with the Labour leader, Jeremy Corbyn. He wanted to know what personal problems people were dealing with as they face the uncertainty over whether they have got a job or not; whether they have got a steel plant or not.

“They have had the stuffing knocked out of them over the last few years. It’s been one blow after another and this shock overnight coming from the board in India is just one more.”

Mr Corbyn has demanded the recall of parliament to discuss the future of the steel industry. He has written to the Prime Minister calling for a debate on the issue, and started an online petition. A spokesman for 10 Downing Street said there was no plan to recall parliament.

Mr Healey said the Government should explain its intentions quickly.

“We have in South Yorkshire with speciality steels some of the best steelmaking, the best quality and the highest performing, anywhere in the world. So there has got to be a future for steelmaking in South Yorkshire and we cannot sit by and allow this to be the end of steelmaking in the UK. You cannot have an advanced economy without a steelmaking base to support your manufacturing base.

“We need a clear statement from the company about what they mean and what they are going to do.

“From the Government we need to know that they are considering all options, including being ready to back a buyout if management and workers want to do that, including taking temporary ownership if that is required to see these plants safeguarded until they can be sold on to buyers who are prepared to invest and stick with British steelmaking for the long-term.”

Penistone and Stocksbridge MP Angela Smith said: “The Government now needs to act to help the steel industry, so far it has done precious little.

“This is not a crisis made in the last 24 hours, it has been building over many months.

“We need more than just the warm words it has so far given, we need action, we need firm plans, and we need a commitment to do what is necessary to make sure the UK steel industry gets through these present difficulties.

“Anything less will be a betrayal of the industry and the many thousands of jobs dependent upon it.”

Business Secretary Sajid Javid, who has said he will cut short his trip to Australia, said the UK steel industry was ‘absolutely vital for the country’.

He said: “I’m deeply concerned about the situation. I think it’s absolutely clear that the UK steel industry is absolutely vital for the country and we will look at all viable options to keep steel making continuing in Port Talbot (the UK’s largest Tata plant).

“We are also very much alive to the human cost and we want to make sure no worker is left behind so where workers are affected that we are doing everything we possibly can to help them and their families.”

Mr Javid said he did not think nationalisation was a solution.

“At this stage, given the announcement from Tata has just come out, it’s important I think we talk to them properly and understand the exact situation and we look at all viable options”, he said.

“I don’t think nationalisation is going to be the solution because I think everyone would want a long-term viable solution.

“And if you look around Europe and elsewhere I think nationalisation is rarely the answer, particularly if you take into account the big challenges the industry faces.”

Union leaders have called on the Government to act and save steel jobs. National officer for GMB Dave Hulse said: “This is absolutely devastating news for all our members, their families and the local communities. Tata has let the whole of the UK steel industry down.

“The plan that was presented to the board deserved to be given time to see if the market improved and it just goes to show what we have thought for a long time, that Tata wanted out and have misled everyone.

“GMB members have done everything that has been asked of them and, just when it was needed, Tata lost their nerve.

“GMB have been involved in steel meetings over many months with government ministers and all we have seen is crisis after crisis, which demonstrates that these have been nothing more than talking shops.

“We have to look at nationalising the steel industry. Even over a short period of time this will be needed to protect the assets. Otherwise, we will end up with the same situation we had with SSI in the north east where the Government badly let everyone down.

“The Government needs to act now and support the steel industry; we are fed up with the false promises. Help is needed now otherwise these communities will never recover from this. Shame on Tata Steel.”

Tata Steel bosses said a number of factors, from global oversupply to high manufacturing costs, had ‘significantly impacted the long-term competitive position’ of steelworks in the UK.

In a statement, the company said it had given ‘substantial’ financial support to its UK business and suffered ‘asset impairment’ of more than £2bn over the last five years. A restructuring plan was deemed unaffordable, with the assumptions behind it ‘inherently very risky’ and its likelihood of delivery ‘highly uncertain’. As a result Tata’s board decided it would not be able to support the plan.

The firm said it was speaking to the Government to achieve ‘the best possible outcome’ for its UK business, and discussions would continue.

Tata said it had advised the board of its European holding company, Tata Steel Europe, to explore ‘all options for portfolio restructuring’ including the ‘potential divestment of Tata Steel UK, in whole or in parts’.

The company said it would decide on the best option as quickly as possible.